The Dollar continues to collapse against the Yen for the third straight day due to escalating US-China trade tensions. President Trump said on Thursday that the US will impose an additional 10% levy on China's goods worth $300 billion. China has vowed to fight back if the tariff hike takes effect on Sept. 1 as planned. Earlier this morning, Beijing has asked buyers to halt purchases of US agriculture products. On the other hand, the Chinese Yuan rose above 7.00 against the US Dollar for the first time on record earlier today as the currency came under pressure due to escalating trade tensions between the two countries. Today, the Yen will likely to remain solidly bid as trade tensions intensifies and if risk aversions worsens.
The Dollar bulls are nowhere to be seen as the pair reports losses for the third straight day and could suffer a deeper drop during the day if the buyers lose the 105.70 and 105.50 support levels. A pullback towards 106.50 to retest the recently broken support isn’t expected amid this recent bearish domination but can’t be ruled out either, before continuing its downward trajectory.
Support: 105.70 / 105.50
Resistance: 106.50 / 106.80